NASDAQ$JRVR

James River Group Holdings Inc · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Reported net income and adjusted net operating income.

James River Group Holdings reported a net income available to common shareholders of $16.9 million, or $0.45 per diluted share, for the third quarter of 2023. The adjusted net operating income was $18.3 million, or $0.48 per diluted share. The company's E&S segment benefited from strong trading conditions, with renewal rate increases of 12% and premium growth in Core E&S divisions exceeding 10%.

  • Group combined ratio of 96.2% and Excess and Surplus Lines segment combined ratio of 88.4%.
  • Core E&S gross written premium increased 10.3% compared to the prior year quarter.
  • E&S segment renewal rate change increased 12.4% from the prior year quarter.
  • Net investment income increased 52.0% compared to the prior year quarter.

Headline financials

Total Revenue

$233M

Previous: $201M+16.0%
EPS (adj)

$0.48

Previous: $0.41+17.1%
Combined Ratio

96.2%

Previous: 94.1%+2.2%
Expense Ratio

27.6%

Previous: 24.6%+12.2%
Loss Ratio

68.6%

Previous: 69.5%-1.3%
Net Investment Income

$26.3M

Previous: $17.3M+52.0%
Capital Expenditures

-$3.31M

Previous: -$4.56M+27.5%
Free Cash Flow

$16.2M

Previous: -$9.19M+276.9%
Net Income

$19.6M

Previous: -$4.62M+523.1%
Operating Income

$122M

Previous: $112M+9.1%
Gross Profit

$208M

Previous: $178M+16.8%
Cash & Equivalents

$233M

Previous: $188M+24.2%
Total Assets

$5.19B

Previous: $5.21B-0.2%

Revenue & EPS history

James River · Revenue · Quarterly

$233M

Q3 2023+16%vs Q3 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

James River · $184M total across 2 segments · Q3 2023

  • Excess and Surplus Lines
    $158M+13.3%
  • Specialty Admitted Insurance
    $26.1M+46.3%

Forward guidance

James River is focused on refocusing resources on businesses with meaningful scale and profitability. Exposure reductions in commercial auto and increased new business opportunities position the company well for the remainder of 2023 and into 2024.

Tailwinds

  • Continued execution on strategy of refocusing resources.
  • E&S segment benefiting from strong trading conditions.
  • Renewal rate increases of 12% in E&S segment.
  • Greater than 10% premium growth in Core E&S divisions.
  • Exposure reductions in commercial auto portfolio.

Headwinds

  • Identified an error in the accounting for reinstatement premium on a specialty casualty reinsurance treaty.
  • Error resulted in overstatements of net income of $7.8 million for the three months ended June 30, 2023.
  • Control over the review of the determination of when reinstatement premiums for reinsurance should be recognized did not operate effectively.
  • Resulting in a material weakness in the Company's internal control over financial reporting.
  • Premium retention in the E&S segment was lower than recent periods and net written premium declined 12.7% from the prior year quarter due to the impact of a new casualty reinsurance treaty put in place for the segment.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

-3.3%

Avg return

Earnings day

-5.5%

Avg return

5 days after

-6.3%

Avg return

30 days after

24%

12 / 49 earnings

Positive

+14.7%

Q3 2025

Best reaction

-28.4%

Q4 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-23.6%-32.3%-35.7%
Q4 2025-6.5%-9.3%-14.2%
Q3 2025+14.7%+6.6%+15.3%
Q1 2025-1.2%-5.1%+19.3%
Q4 2024-28.4%-16.9%-17.6%
Q3 2024-24.3%-29.3%-30.4%
Q2 2024-8.3%-6.4%-11.4%
Q1 2024-7.9%-6.8%-12.5%
Q4 2023-5.6%-6.7%-12.1%
Q3 2023-6.5%-34.4%-37.3%
Q2 2023-8.1%-9.2%-17.8%
Q1 2023+4.4%+6.6%-2.8%
Q4 2022+8.7%+10.2%-6.6%
Q3 2022-5.3%-9.2%-4.5%
Q2 2022-1.3%+2.3%+0.0%
Q1 2022+6.6%+13.0%+12.3%
Q4 2021-19.3%-21.8%-8.6%
Q3 2021-2.0%-3.9%-20.0%
Q2 2021+4.5%+5.6%-0.5%
Q1 2021-27.6%-26.0%-24.3%
Q4 2020-1.9%-5.9%-7.1%
Q3 2020-4.4%-9.2%-9.9%
Q2 2020+2.0%+1.0%+6.2%
Q1 2020-3.5%-7.8%+5.2%
Q4 2019+5.9%+3.2%-33.6%
Q3 2019-1.3%-1.0%+14.5%
Q2 2019-2.1%-1.4%+2.9%
Q1 2019+3.0%+8.9%+5.6%
Q4 2018-3.0%-2.5%-5.5%
Q3 2018-3.8%-9.6%-3.7%
Q2 2018-0.2%-3.2%-1.1%
Q1 2018+5.3%+4.3%+6.8%
Q4 2017-13.2%-15.8%-14.0%
Q3 2017-2.7%-1.9%-4.1%
Q2 2017-0.6%-0.2%-0.7%
Q1 2017-1.7%-5.2%-9.1%
Q4 2016+4.8%+4.1%-2.2%
Q3 2016-2.0%-1.6%+3.8%
Q2 2016+0.8%+3.8%+9.8%
Q1 2016+5.5%
Q4 2013-0.6%
Q4 2015-5.7%
Q3 2014-2.2%
Q3 2015-2.2%
Q2 2014-0.4%
Q2 2015-0.4%
Q1 2014-0.5%
Q1 2015-0.5%
Q4 2014-0.5%
Q3 2013
Q2 2013
Q1 2013

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